Temasek And A Black Hole Named Merrill

From CNN Money:

More pain for Merrill Lynch
Wall Street firm's quarterly loss is even wider than expected after billion in writedowns, and it plans to cut 4,000 jobs.
By Tami Luhby

April 17, 2008: 7:04 AM EDT

NEW YORK (CNNMoney.com) -- The pain isn't over for Merrill Lynch & Co.

The investment bank Thursday missed even the drastically lowered estimates for its first-quarter results, reporting a net loss of $1.96 billion, or $2.19 per diluted share.

The company also plans to cut about 4,000 jobs, or about 10% of its workforce, excluding financial advisers and investment associates. It will focus the reductions in its global markets and investment banking division.

Net revenue was $2.9 billion, down 69% from the prior-year period, primarily due to net writedowns totaling $1.5 billion related to asset-backed securities and a downward adjustment of $3 billion related to hedges with financial guarantors.

"Despite this quarter's loss, Merrill Lynch's underlying businesses produced solid results in a difficult market environment," said John A. Thain, chief executive officer, who said the bank remained well-capitalized.

Analysts had projected a $1.99 per share loss on a net loss of $1.4 billion and revenue of $3.7 billion.

Wall Street was prepared for horrendous earnings from Merrill Lynch (MER, Fortune 500). Analysts were almost tripping over themselves to cut profit estimates and enlarge writedowns, suspecting the value of the company's assets had fallen steeply in recent months. Only a month ago, analysts were predicting profit of 48 cents per share. At the start of 2008, the consensus estimate was $1.52 per share.

"Unfortunately, Merrill has significant balance sheet exposures in many of the asset classes that experienced continued pricing pressure in [the first quarter]," wrote Jeff Harte in an April 2 note.

.... Merrill Lynch raised $12.8 billion in capital during the past two quarters and Chief Executive John Thain has said he doesn't plan to raise any more.

Early last year, I came close to accepting a job at Merrill Lynch. It was quite tempting, not only because Merrill Lynch was a brand name organisation then, but also because the job was in a rapidly growing sector - commodities.

The commodities space is still hot - in fact, it's arguably the only thing that's still hot in the financial world. It's not just the usual oil, gas and gold stories - now, even plain old rice has become a hot commodity.

Merrill Lynch is, however, no longer a brand name. Instead, among all the investment banks in the world, it's probably the one that was hardest-hit in the US subprime crisis. Merrill Lynch will take a long time to recover from this mess, if it ever does.

Oh well. Just as well I didn't join Merrill.

It's barely been 4 months since Temasek started buying into Merrill Lynch, and Temasek is already sitting on paper losses of more than half a billion USD dollars. Citizens, are you worried for Singapore yet?

Contagious Diseases On A Crowded Little Island

ST April 16, 2008
HFMD epidemic may be the worst since 2000
Over 1,000 kids fell ill last week, 13 warded; virulent EV71 virus behind 16% of cases By Salma Khalik & Sujin Thomas

SINGAPORE may be facing its most serious hand, foot and mouth disease (HFMD) outbreak since an epidemic killed seven children eight years ago.

More than 1,000 children fell ill last week - the highest number of weekly infections since the 2000-2001 period.

Of the 13 who needed hospitalisation, one girl was seriously ill, with inflammation of the brain.

..... HFMD is endemic in Singapore, with children catching the virus almost daily.

Symptoms include fever, headache, sore throat and a red rash, usually on the limbs and in the mouth, which gives the illness its name.

I just read the latest parents' newsletter from my kids' school (yes, the same one which teaches sex education to little kids). The newsletter reported that one student has just come down with HFMD.

Since HFMD is highly contagious, this means, unfortunately, that more students at the school may possibly be coming down with the illness in the next week or so. The usual incubation period is between 3 to 7 days.

I've just discussed with Mrs Wang and we decided that our little kids will get to skip school for the next few days.

Incidentally, I've often wondered whether the government has really considered the potential health implications of its ambitious population plan. I'm referring to the government's plan to increase Singapore's resident population to 6.5 million people (mainly by importing more foreigners).

There are plenty of reasons why we should be cautious about such a plan. One reason is that we live in a time where mankind seems to be constantly threatened by the likes of SARS and bird flu.

Squeeze 6.5 million people together on a little red dot. Make it the world's most densely populated country. Every day, pack a great number of citizens like sardines into the public transport system. What do you get?

Potentially, a great recipe for a massive epidemic .....

Online Election Campaigning Leads to Corruption. Huh?

Here's PM Lee spouting mysterious words again:

ST April 14, 2008
Laws must keep up with changing new media, says PM
But any loosening up will be handled cautiously, he adds

THE new media is changing rapidly and Singapore's laws must evolve to keep up, Prime Minister Lee Hsien Loong said.

But any loosening up will be done carefully.

Otherwise, misinformation and extremist views could proliferate.

Politics might also become tainted by graft if parties have to spend large sums to campaign online, he warned.

I wonder what that is supposed to mean.

It is very difficult to see how one can spend large sums of money campaigning online. In Malaysia's recent elections, the Internet played a huge role in influencing voters. Yet practically all the Internet activity took place via Blogger, Wordpress, Youtube and other completely free Internet platforms.

Contrast this with campaigning offline. You would have to spend money printing and distributing posters; placing advertisements in traditional newspapers; hiring lorries and drivers to ferry candidates around the country to meet the electorate; and making large-scale logistics arrangements for election rallies. That won't be cheap.

Anyway, suppose we accept PM Lee's strange logic - that politics might become tainted by corruption if parties have to spend large sums to campaign online. It must then follow that since traditional, offline campaigning costs much more money, it is even more likely to lead to corruption.

Then we wonder - how come this seems to be an issue in Singapore only? After all, election campaigning occurs in every democratic nation on this planet. In fact, campaigning is a necessary part of the democratic process. Yet no one ever seems to says that democracy breeds corruption.

No one except PM Lee, that is.

Current laws disallow the making and distributing of party political films.

During campaign season, political parties are not allowed to put audio or video-casts on their websites.

Mr Lee warned that Singapore would suffer if elections came to be fought through expensive online films and advertisements.

'If a party needs money, many people are willing to donate, but these political contributions never come with no strings attached. After you win and come into power, the donors will turn up politely to 'collect their dues',' he said.

Oooh, I see. PM Lee is worried about expensive online films and advertisements.

So, hypothetically speaking, suppose an Opposition candidate merely uses his own cheap, lousy video camera at home to film his own speech, and then he posts the video on Youtube, where it is widely viewed by Singaporeans. PM Lee shouldn't be worried about that, should he?

Heheh. Well, think what you like. And draw your own conclusions. Mr Wang is only here to encourage you to think.

A Tale of One Jack Chick and Two Religions

This is going to be quite an interesting case to watch. Since details are not yet available, I'm posting the article below mainly for future reference.

ST April 15, 2008
Couple charged under Sedition Act
By Elena Chong

A COUPLE were charged on Tuesday with distributing a seditious publication to two others.

Ong Kian Cheong, 49, and Dorothy Chan Hien Leng, 44, are alleged to have distributed The Little Bride, an evangelistic material, to Sembawang resident Irwan Ariffin last Oct 19.

They are also said to have distributed the same publication to one Madam Farharti Ahmad at her home in Woodlands on March 6 last year .

It is not clear why they face the Sedition Act and the Undesirable Publication Act when the publication is the same.

Ong, who works in a telecommunications company, and his wife, a bank employee, were represented by Mr Selva K. Naidu.

The police prosecutor sought an adjournment of the case pending a Health Sciences Authority on handwriting specimen.

The couple were freed on $10,000 bail each. Their passports were impounded.

The case will be mentioned on April 29.

Under the Sedition Act, the maximum penalty is a $5,000 fine and/or a jail term of up to three years.

The maximum penalty under the Undesirable Publication Act is a fine of up to $5,000 and/or up to 12 months.

I had not heard of "The Little Bride" before, so I got curious and decided to google to find out more. After a quick bit of Internet searching, I've found out that it is a evangelical cartoon/comic series produced by an American named Jack Chick, who has a reputation of being very controversial.

Direct access to Jack Chick's official website has been blocked by the Media Development Authority. However, if you google around, you can see some of Jack Chick's works on other websites / blogs. I'm not supplying the links.

I have to say that if I were a Muslim, I would probably be very, very offended by some of these works.

However, at the same time, I am wondering how the Christian community in Singapore would react to the prosecution of Ong Kian Cheong and Dorothy Chan. These two individuals probably saw themselves as faithfully and courageously seeking to spread the word of God (the Christian God, I mean).

This could be a very complex, challenging case for the prosecution, if the accused persons claim trial. Ahh, times like this, I almost wish I was still a Deputy Public Prosecutor.

P.S I am, by the way, neither Christian nor Muslim.

P.S.S Readers who wish to post any comments on this post, please avoid using inflammatory or religiously offensive language.

The Search For Political Leaders

"Yes, you heard me right.Back in 1978, Hillary scored a C for her A-level Chemistry.Clearly she's not fit to be the President!"
That was a joke, of course. Barack Obama never said such a ridiculous thing. And no sensible American would care what grades Hillary scored in high school. Hillary herself would probably have forgotten. In the quest for the best presidential candidate, there must surely be many better things to focus on.

Tragically, this joke is not a joke in Singapore. The search is on for the next Prime Minister of Singapore. And from the sound of it, A-level grades are an important criterion:

ST April 2, 2008
PM still looking for his successor
It takes about three elections to groom a leader, so there's no time to lose, he says
By Lydia Lim

THE Prime Minister faces an urgent task: Find and field those who can take over from him before he turns 70.

Already 56, Mr Lee Hsien Loong is seeking political talent in their 30s and early 40s, one of whom he hopes will emerge as his successor.

He has no time to lose as past experience indicates that it takes about three general elections to groom a leader.

This means those who contest the next polls, due by 2011, might be ready to lead only two elections after that.

By then, Mr Lee will be 69 years old.

'That is very late. So there's no time to be lost,' he said in an interview with The Straits Times and Chinese daily Lianhe Zaobao at the Istana yesterday.

...... Of concern to him is the outflow of top talent abroad.

He looked at recent data on the 600-odd students who score four As in their A levels each year.

About two-thirds pursue university degrees here, and one-third go overseas.

Of those who go overseas, at least 100 are not on scholarships. About half of these non-scholarship holders do not return but work abroad after they graduate.

In addition, another 100 of those who get their degrees here go overseas to work. They may come back one day but there is no guarantee.

'This flow is going to continue,' Mr Lee said.

'So it's a big challenge to find successors, particularly for politics.'

We learn that PM Lee Hsien Loong wants to groom his potential successor over a 15-year period. Possible candidates should now be in their 30s or early 40s - let's say they are about 37 years old, on average. The actual successor would take office as PM around the year 2023.

Thus we may say that whether you become the Prime Minister of Singapore at the age of 51 depends on how well you scored in your A-levels, at the age of 17.

Farsightedness is a virtue. A neurotic obsession with academic grades is not.

In 2008, it would be somewhat insane to scrutinise Hillary Clinton's or Barack Obama's high school grades, as a basis for selecting the next presidential candidate.

And in my opinion, it would be just as insane to choose to groom a Prime Minister to take office in 2023, on the basis of the A-level grades he scored as a teenager, 34 years earlier, in 1989.

Now of course, PM Lee Hsien Loong will not use A-level grades as his sole selection criterion. But the fact that he uses A-level grades as a selection criterion at all is quite shocking.

In my opinion, A-level grades are just simply quite irrelevant. Even if you were the best A-level student in the whole of Singapore, this demonstrates nothing about your ability to lead a nation. And conversely, even if you flunked your Chemistry paper, this doesn't mean that you can't lead a nation.

Winston Churchill - a well-known dumbo in class.
Also one of the greatest leaders in the history of Europe.